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The Nepalese village of Thulo Pakhar was devastated by an earthquake in 2015. In the summer of 2017, CED major Kelli Herr examined how volunteers who travel to Nepal for relief efforts can impact the local economy.

Image: Kelli Herr

Penn State student explores the economic impact of disaster relief in Nepal

Kelly Jedrzejewski

October 3, 2017

Penn State student explores the economic impact of disaster relief in Nepal

Kelli Herr had an amazing summer. The Haymarket, Virginia, native spent her break a long way from home in Thulo Pakhar, Nepal. She worked with a group called All Hands Volunteers, a U.S.-based nonprofit disaster relief organization. A close friend of Herr’s, who had previously done research and traveled in Nepal, told her about the All Hands organization.

Herr, a member of Schreyer Honors College, is a senior in the Community, Environment and Development (CED) major in College of Agricultural Sciences with a minor in Entrepreneurship and Innovation. The CED major is an interdisciplinary social science degree designed to help students develop the skills needed to work with individuals, communities, governments and organizations to solve societal problems and improve quality of life in communities.

Herr said her work with All Hands fit in with her major better than she ever would have imagined. “My time in Nepal showed me how applicable my major is. I’ve always been interested in humanitarian work and having the skills to help the community even further is great.”

In 2015, Nepal experienced a severe earthquake and the country is still recovering two years later. A lot of the work Herr did with All Hands was labor-intensive, including helping to rebuild two schools. The volunteers were up early -- usually 5:30 a.m. -- so they could head out to the construction site for the day’s work. For Herr, working with local masons was a great opportunity to become familiar with the culture of Nepal and create strong ties with community of Thulo Pakhar.

“The majority of the local masons we worked with actually attended the school when they were kids. It was really cool to be part of that rebuilding process with them,” Herr said.

Construction did not occupy all of Herr’s time, however. After spending a few weeks in Nepal, she began to wonder what impact volunteers would really have on the local economy. “It’s a temporary project and I knew we wouldn’t be in Nepal forever. I wanted to know what was going to happen when we weren’t there pumping those dollars into the community anymore,” she said.

Herr recognized that the volunteers were potentially creating a “boom and bust cycle,” a phenomenon that she had learned about in her CED coursework.

Penn State Professor of Agricultural Economics Timothy Kelsey, who is the program coordinator for the CED major, explained that a sudden influx of volunteers spending money locally (the boom) potentially could leave local businesses that adjusted to take advantage of the boom worse off after the volunteers leave -- which leads to a bust.”

After speaking with staff members at All Hands, Herr took it upon herself to research the impacts volunteers were having. She put together a survey asking storeowners in the community questions about how many volunteers were shopping at their store, if they were saving money and what kind of investments they were making.

“We found the volunteers were only shopping at a quarter of stores in town. Those stores were making a ton of money and were able to save some and invest it in their homes or in their children’s educations. The other stores didn’t get the same economic opportunities,” Herr said.

With this in mind, Herr and other members of All Hands started a “Spread the Wealth” campaign. Because the high turnover rate of so many volunteers can dramatically impact the economy, it is important to for volunteers to support as many local businesses as possible.

As with any new project, it will take time to see the impact of Herr's campaign. But while there was not much of a chance for Herr to follow up with stores in Thulo Pakhar, All Hands has recognized the economic impact they may be having on the communities they are working in. The project Herr helped develop is being adapted for use in all future projects in Nepal.

“Kelli’s observations led to the development of methods to minimize potential damages from this boom and bust cycle by finding ways for volunteers to spend more broadly and productively impact the community,” said Kelsey. “Even though she was primarily in Nepal to do manual labor, Kelli identified and raised the need for the All Hands agency to be aware of its economic impacts. She was encouraged to pursue this research and designed and implemented a series of projects to address the issue.”

The volunteers were there to help the community, and not just by building schools, noted Herr. “We want to do anything that we can. You get to know these people personally and you only want what’s best for them,” she said.